The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1887-04-04
THE LONG AND SHORT HAUL.
The Railway Commission Requested to
Pass Upon Pulling Question.
rgument by the Vice President of the Louis
Vile & Nashville Road-lIeavy Freight
Business Over Indianapolis Lines.

fifteen or twenty in number. Milton II. Smith,
vice president of the Louisville e. Nashville rail-
road. was selected as the spokesman of the dele
they were present to apply for authority to
charge less for the transportation of property
between competitive points by the lines of the
members of the association than between inter
mediate points. He said that the association
was only one Of several which had come into
existence through the rapid development of the
transportation system during the last twenty
years. eat first little effort was made by the
railroad lines for cooperation. Shippers were in
the habit of shipping to forwarding
houses when their shipments passed
beyond the terminus OF the first road.
Out of this condition grew the fast-freight lines.
formed by forwarders, who, by making special
arrangements, were able to secure rates below
those which shippers would be compelled to pay
10 the road if they dealt individually. Then the
roads began the through trafic system, and fire.
quent conferences between agents of the various
lines became necessary, which conferences final
ly resulted in associations, of which the South
ern Railroad and Steamship Association was one.
He read the articles of association.
Commissioner Walker asked if the association
was in the nature of pool.
Mr. Smith replied that everything in the
nature of an allotment of traffic, ordinarily
termed pooling arrangements had been emi-
uated. Very little authority he continued was
delegated to the association. The organization
depended upon voluntary compliance with the
arrangements agreed upon. There was no power
to enforce compliance,
Mr.. Smith produced map of the territory
covered DOlntod
water lines which surrounded and penetrated it.
Many of the lines of transportation upon these
waters, he said, were not subject to the inter
state-commerce law, though nearly all of them
were engaged in interstate traffic. The first of
the railroads were built to connect particular
points with the water. Their rates were in all
cases. greater for a long than short haul 1t
was found that, for short distances animal
transportation was cheaper than rail traffic, but.
for distances of twenty-five miles or more, rail
transportation at profitable rates was cheapest.
When, after a time great agricultural centers
were reached, it was found that upon some ma
terials of large bulk the established rates were
such that no shipments could be proftably
made. This discovery gave the railroad people
their first lessons in the art of
promoting transportation" When different
lines were completed to points where
they came into competition with each other and
with water lines railroad managers first aToke
to the fact that they could compete with water
lines, which they had never before expected to
accepting less for the long than the short hauls.
A discovery was made which was and is SEEM
ingly paradox. 1t was that traffic could be
transported and yield profit at rate that is
less than the average cost; that additional traf
&c secured at the rate that yields a revenue in
Excess of the additional cost OF carriage, though
less than the average cost, produces profit"
Mr. Smith contended that the rates fixed by the
Louisville d Nashville company not in vio-
lation of the act of Congress. If prohibited
from charging less for longer distance than
for shorter where the conditions are
substantially similar. then, he argued, they
we're authorized to charge less for a long than
for short distance where the conditions
substantially dissimilar, provided the rates to
and from non-compettive points are just ard
reasonable. Some of his associates, represent
ing other large corporations, did not agree with
him, but held that under no conditions could
any greater charge be made for a short than for
a longer haul unless authorized by this COM
mission. Mr.. Smith said his company had re-
North that from and after the 5th instant all
existing traffic arrangements must cease. This
was due, he explained, to difference in the in
depreciation of the law These roads based
Louisville & Nashville to reduce
;ts local rates below it's through
rates, holding that they would be liable as par
Elephants in penalties incurred by the former.
Mr.. Smith set forth at considerable length the
circumstances which led the Northern trunk
lines to make such a construction of the law.
They were not subject, to such an extent to
water competition, and their Interpretation was
the only one that was advantageous to them.
They would appear before the commission and
advocate an Interpretation which would benefit
them but bankrupt u.s." MIR. Smith did not be-
lieve there was any reason for the present agi-
taton. Surely, carriers were not to be punished
for a violation of law which they could not
understand. 1t was clear now that the commits
sion should have been organized. and should
have heard these questions and decided them
earlier. If the anticipated change were enforced
at once commercial distress would at least be
threatened.
General Alexander, President of the Central
Georgia road, set forth the reasons which led
his line to give lower rates from New York to
Macon and Montgomery than to Mobile and
by competitors who were entirely independent
of the commission. Not more than two OF
three of the lines composing the association
were paying. His own line was one of the
paying ones. but it did not pay largely. If com
PEELED to reduce intermediate rates below the
all-water rates to New Orleans, his company
would lose ten dollars in local traffic for every
three dollars gained in through traffic.
Edgar w. johnson, general counsel for the
East tennessee, Virginia d. Georgia railroad
said it was very evident the commission could
not investigate the questions presented and &c
Do presented between now and April 5, yet il
was equally evident that unless relief were
granted, all commerce between the North and
South must end on the 5th since the Northern
roads would not risk the penalties which might
DO incurred by following any other than their
own Interpretation OF the law.
Henry Fink, vice president of the East Ten
aessee Virginia 81 Georgia road. said the rigiC
construction of the long-and short-haul provis
ton meant bankruptcy. This provision he was
sure, was a concession to popular clamor, to aD
attract sentiment Congress had found it neces
sary to put it in, but also found it necessary t,
empower the commission to suspend it. Wha
kind of schedules were the roads TO file between
now and the 9th of April If they put up the
through rate to level with local rates they
would lose their traffic, and that meant bank
ruptcy. If they put down local rates they coul(
never get them back, and that, too meant bank
-uptcy.
Several hours were spent by the commits
sioners to-day in opening letters and givins
hasty informal glances at their contents. afte
which they were passed to the acting secretary,
Major Jonas, for briefng. jacketing and classii
cation. A majority of them not including an
plications for clerkships consist Of requests TO,
Interpretation of special points of the law and
not a few ask about points which the Language
of tie measure explains plainly and in full
The commission adjourned at P. NJ.
Big Judgment Entered.
Special to tho Indianapolis Journal.
TOLEDO, o., April I'm the United State